**United
      States**


**Securities
      and Exchange Commission**


**Washington,
      DC 20549**





**FORM
      10-QSB**





QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934








For
      the
      quarterly period ended **June
      30, 2007**





Commission
      File Number **000-28789**








**Falcon
      Ridge Development Inc.**





(Exact
      name of registrant as specified in its charter)








**Nevada**
            
            **84-1461919**(State
                or other jurisdiction of incorporation)
            
            (IRS
                Employer File Number)**5111
                Juan Tabo Boulevard N.E. Albuquerque, New
                Mexico**
            
            **87111**(Address
                of principal executive offices)
            
            (zip
                code)




**(702)
      386-5379**


(Registrant's
      telephone number, including area code)








Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports); and (2) has been subject
      to such filing requirements for the past 90 days **Yes
      [X]** No []








Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)   Yes
      [
      ] **No
      [X]**








State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: 14,616,233 **** shares
      of
      common stock.





Transitional
      Small Business Disclosure Format (check one): Yes [ ] **No
      [X]**











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          1
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**TABLE
      OF CONTENTS**







**Page**PART
                I- FINANCIAL INFORMATIONItem
                1. Financial Statements.
            
            3Item
                2. Management's Discussion and Analysis or Plan of
                Operation.
            
            15Item
                3. Controls and Procedures
            
            18PART
                II - OTHER INFORMATIONItem
                1. Legal Proceedings.
            
            19Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            19Item
                3. Defaults Upon Senior Securities.
            
            19Item
                4. Submission of Matters to a Vote of Security Holders.
            
            19Item
                5. Other Information.
            
            19Item
                6. Exhibits and Reports on Form 8-K.
            
            20Signatures
            
            21




**Index
        to Consolidated Financial Statements**
 **(Unaudited)**
 
 **Page**Consolidated
                  Balance Sheet (unaudited) at June 30, 2007
              3Consolidated
                  Statements of Operations (unaudited), for the three months and nine
                  monthsended
                  June 30, 2007 and 2006
              4Consolidated
                  Statements of Cash Flows (unaudited) , for the nine months ended June
                  30, 2007 and 2006
              5Notes
                  to Consolidated Financial Statements
              6


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            2
            -*




**FALCON
      RIDGE DEVELOPMENT, INC.**


**Consolidated
      Balance Sheet**


**(Unaudited)**




**Assets**Real
                  estate held for development and sale
              
              $
              3,162,212Fixed
                  assets, net of accumulated depreciation
              
              
              31,651Cash
              
              
              130Prepaid
                  expenses
              
              
              100,000Other
                  assets
              
              
              220Total
                  assets
              
              $
              3,294,213**Liabilities
                  and Shareholders' Equity****Liabilities**Indebtedness
                  to related parties
              
              $
              1,266,409Notes
                  payable
              
              
              560,483Accounts
                  payable
              
              
              655,143Retainage
                  payable
              
              
              90,000Accrued
                  expenses
              
              
              88,224Preferred
                  shares subject to mandatory redemption
              
              
              485,000Total
                  liabilities
              
              
              3,145,259**Shareholders'
                    Equity**Preferred
                  stock,Class A  .0001 par value,400,000
                  shares authorized, 160,000 shares issued andoutstanding
              
              
              400,000Common
                  stock, $0.001 par value, 50,000,000 sharesauthorized,
                  18,276,579 shares issued andoutstanding
              
              
              766,777Additional
                  paid-in capital
              
              
              1,268,790Accumulated
                  deficit
              
              
              (2,286,613
              )148,954Total
                  Liabilities and Shareholders' Equity
              
              $
              3,294,213





See
        accompanying notes to consolidated financial statements




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          3
          -*





**FALCON
      RIDGE DEVELOPMENT, INC.**




**Consolidated
      Statement of Operations**


**(Unaudited)**




**Three
                  Months Ended**
              
              
              **Nine
                  Months Ended****June
                  30**
              
              
              **June
                  30****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Lot
                  sales:Net
                  sales
              
              $
              —
              
              
              $
              —
              
              
              $
              —
              
              
              
              643,969Costs
                  of sales
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (689,730
              )Gross
                  profit (loss)
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (45,761
              )Compensation
                  paid in stock
              
              
              3,660
              
              
              
              —
              
              
              
              383,885
              
              
              
              2,300Selling,
                  general and administrative expenses
              
              
              97,224
              
              
              
              171,978
              
              
              
              415,904
              
              
              
              477,114Loss before
                  provision for income taxes
              
              
              (100,884
              )
              
              
              (171,978
              )
              
              
              (799,789
              )
              
              
              (525,175
              )Income
                  taxes
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Loss
              
              $
              (100,884
              )
              
              $
              (171,978
              )
              
              $
              (799,789
              )
              
              
              (525,175
              )Loss
                  per share
              
              $
              —
              
              
              $
              —
              
              
              $
              —
              
              
              
              —Weighted
                  average number of shares outstanding
              
              
              14,616,233
              
              
              
              3,761,233
              
              
              
              12,412,442
              
              
              
              3,761,233


See
        accompanying notes to consolidated financial statements


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          4
          -*




**FALCON
      RIDGE DEVELOPMENT, INC.**




**Consolidated
        Statements of Cash Flows**
 **(Unaudited)**




**Period
                  Ended****June
                  30****2007**
              
              
              **2006**Cash
                  flows from operating activities:Net
                  income/loss
              
              $
              (799,789
              )
              
              $
              (525,108
              )Adjustments
                  to reconcile net loss to net cashused
                  by operating activities:Depreciation
              
              
              4731
              
              
              
              2,494Changes
                  in operating assets and liabilities,excluding
                  effects of business combinations:Land
                  development costs
              
              
              (318,772
              )
              
              
              (409,032
              )Stock
                  based compensation
              
              
              383,885
              
              
              
              2,300Prepaid
                  expenses
              
              
              (100,000
              )
              
              
              (220
              )Retainage
                  payable
              
              
              —
              
              
              
              (106,962
              )Accrued
                  liabilities
              
              
              —
              
              
              
              59,391Accounts
                  payable
              
              
              351,382
              
              
              
              (13,323
              )Deferred
                  revenue
              
              
              —
              
              
              
              (196,500
              )Net
                  cash (used in) provided byoperating
                  activities
              
              
              (478,563
              )
              
              
              (1,186,960
              )Cash
                  flows from investing activities:Acquisition
                  of fixed assets
              
              
              —
              
              
              
              (32,349
              )Net
                  cash used ininvesting
                  activities
              
              
              —
              
              
              
              (32,349
              )Cash
                  flows from financing activities:Increase
                  in related party indebtedness
              
              
              284,767
              
              
              
              635,850Repayments
                  of notes payable
              
              
              —
              
              
              
              (90,868
              )Increase
                  in notes payable
              
              
              190,172
              
              
              
              —Repayments
                  of real estate contract
              
              
              —
              
              
              
              —Proceeds
                  from preferred shares
              
              
              —
              
              
              
              415,000Net
                  cash used infinancing
                  activities
              
              
              474,939
              
              
              
              959,982Net
                  change in cash
              
              
              (3,624
              )
              
              
              (259,327
              )Cash:Beginning
                  of period
              
              
              3,754
              
              
              
              323,505End
                  period
              
              $
              130
              
              
              $
              64,178Supplemental
                  disclosure of cash flow information:Cash
                  paid during the period for:Income
                  taxes
              
              $
              —
              
              
              $
              —Interest
              
              $
              12,035
              
              
              $
              4,278




See
        accompanying notes to consolidated financial statements


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          5
          -*





**FALCON
      RIDGE DEVELOPMENT, INC.**





**Notes
      to Consolidated Financial Statements**


**(Unaudited)**





(1)
        Summary of Significant Accounting Policies
 
 Organization,
        Shell Merger and Principles of Consolidation
 
 Organization
 
 Falcon
        Ridge Development, Inc. ("FRDI" or the "Company") is engaged in the real
        estate
        industry and acquires tracts of raw land and develops them into residential
        lots
        for sale to homebuilders. In addition, FRDI plans to expand its operations
        into
        the homebuilding business. These operations are predominantly located in
        the
        City of Rio Rancho, New Mexico and Belen, New Mexico. Since inception, the
        Company has developed one property known as Sierra Norte.
 
 Going
        Concern
 
 The
          Company experienced significant operating losses during the three and nine
          months ended June 30, 2007 and 2006, of $100,884, $171,978 and $799,789
          and
          $525,175 respectively.  The Company has a working capital deficit and
          implementation of its business plan is dependent upon its ability to raise
          additional capital.  These matters raise substantial doubt about the
          Company’s ability to continue as a going concern. Management believes that it
          will be successful in raising additional capital and that it has assets
          available to securitize debt should the Company look to borrow.  The
          accompanying financial statements do not include any adjustments relating
          to the
          recoverability and classification of the recorded asset amounts or the
          amounts
          and classification of liabilities that might be necessary should the Company
          be
          unable to continue in existence.
 
 Shell
        Merger
 
 On
        May
        20, 2005, Sierra Norte LLC ("SNLLC") exchanged certificates representing
        100
        percent of its equity securities for 100,000,000 shares of the common stock
        of
        Pocketspec Technologies, Inc. (PTI), a public shell company. The acquisition
        has
        been treated as a recapitalization of SNLLC, a New Mexico limited liability
        company, with PTI the surviving legal entity. Since PTI had, prior to the
        merger, minimal assets, (consisting of cash) and no operations, the
        recapitalization has been accounted for as the sale of 37,265,372 shares
        of
        common stock for the net assets of PTI. After the closing of the acquisition,
        there were 137,265,372 shares of common stock of the Company issued and
        outstanding. PTI was incorporated under the laws of Colorado in 1998. In
        June
        2005, PTI changed its domicile to Nevada and its name to Falcon Ridge
        Development Inc.
 
 SNLLC
        was
        deemed to be the acquirer (for accounting purposes) in the reverse acquisition
        and, consequently, the assets and liabilities and historical operations that
        are
        reflected in the accompanying financial statements are those of SNLLC and
        are
        recorded at the historical cost basis of SNLLC.
 
 In
        connection with the merger, PTI sold to a group of its shareholders, PTI's
        color
        comparison devices business in exchange for an indemnification from liabilities
        by these investors. These shareholders assumed the color comparison devices
        business including its liabilities. The sale was consummated between related
        parties. Accordingly, the sale was booked as a capital transaction and no
        gain
        or loss on the transaction was recorded.


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          6
          -*


**FALCON
      RIDGE DEVELOPMENT, INC.**





**Notes
      to Consolidated Financial Statements**


**(Unaudited)**











Since
        incorporation in 1998, PTI has conducted three businesses. Originally PTI
        was in
        the retail arts and crafts industry. PTI then transitioned into the real
        estate
        development business, where it acquired and developed real estate properties
        for
        its own account, primarily in Colorado. Finally, PTI became a technology
        company. In 1999, PTI filed a registration statement on Form 10-SB with the
        U.S.
        Securities and Exchange Commission to become a reporting company under Section
        12G of the Securities and Exchange Act of 1934.
 
 Principles
        of Consolidation
 
 The
        consolidated financial statements include the accounts of Falcon Ridge
        Development, Inc. and its wholly owned subsidiaries SNLLC and Spanish Trails
        LLC
        (STLLC) (together, the "Company"). Intercompany transactions and balances
        have
        been eliminated in the consolidation.
 
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities, and disclosure of contingent assets and liabilities at the date
        of
        the financial statements, and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those
        estimates.
 
 
 Revenue
        Recognition on Sales of Real Estate
 
 The
        profit on sales of real estate is accounted for in accordance with the
        provisions of SFAS No. 66, "Accounting for Sales of Real Estate." The Company
        recognizes revenue from the sale of real estate at the time the sale is closed
        and the title is transferred from the Company to the buyer.
 
 Cash
        and Cash Equivalents
 
 The
        Company considers all highly liquid securities with original maturities of
        three
        months or less when acquired to be cash equivalents. The Company had no cash
        equivalents at June 30, 2007 and 2006.
 
 Real
        Estate Held for Sale
 The
        carrying value of land and development includes the initial acquisition costs
        of
        land, improvements thereto, and other costs incidental to the acquisition
        or
        development of land. These costs are allocated to properties on a relative
        sales
        value basis and are charged to costs of sales as specific properties are
        sold.
        Due to the nature of the business, land and development costs have been
        classified as an operating activity on the consolidated statement of cash
        flows.
 
 Impact
        credits received from the negotiated settlement with the City of Rio Rancho
        are
        offset against land development costs.
 
 The
        company reviews the fair value less costs to sell of land under development
        at
        the end of each reporting cycle and where the carrying value of the asset
        is not
        recoverable and exceeds its fair value an impairment loss will be
        recognized.


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          7
          -*





**FALCON
      RIDGE DEVELOPMENT, INC.**





**Notes
      to Consolidated Financial Statements**


**(Unaudited)**





Interest
 
 The
        Company capitalizes interest costs to real estate held for resale during
        development and construction. Capitalized interest is charged to cost of
        sales
        as the related lots are delivered to the buyer.
 
 Fixed
        Assets and Depreciation
 
 Fixed
        assets are recorded at cost. Expenditures that extend the useful lives of
        assets
        are capitalized. Repairs, maintenance and renewals that do not extend the
        useful
        lives of the assets are expensed as incurred. Depreciation is provided on
        the
        straight-line method over the following estimated useful lives: software,
        5
 years;
        equipment, 5 years.
 
 
 Earnings
        (loss) per Common Share
 
 Basic
        net
        income per share is computed by dividing the net income available to common
        shareholders (the numerator) for the period by the weighted average number
        of
        common shares outstanding (the denominator) during the period. The computation
        of diluted earnings is similar to basic earnings per share, except that the
        denominator is increased to include the number of additional common shares
        that
        would have been outstanding if potentially dilutive common shares had been
        issued.
 
 At
        June
        30, 2007, there was no variance between basic and diluted loss per share
        as the
        convertible preferred stock outstanding, if converted, would be
        anti-dilutive.
 
 Impairment
        or Disposal of Long-Lived Assets
 
 The
        Company evaluates real estate projects and other long-lived assets on an
        individual basis for impairment whenever events or changes in circumstances
        indicate that the carrying amount of an asset may not be recoverable in
        accordance with SFAS No. 144, "Accounting for the Impairment or Disposal
        of
        Long-Lived Assets" and SFAS 67 “Accounting for Costs and Initial Rental
        Operations of Real Estate Projects.” An asset is considered impaired if its
        carrying amount exceeds the future net cash flow the asset is expected to
        generate or its net realizable value. If an asset is considered to be impaired,
        the impairment to be recognized is measured by the amount by which the carrying
        amount of the asset exceeds its fair market value. We assess the recoverability
        of our real estate projects, long-lived and intangible assets by determining
        whether the unamortized balances can be recovered through undiscounted future
        net cash flows of the related assets. The amount of impairment, if any, is
        measured based on projected discounted future net cash flows. When impairment
        exists the carrying value of the asset will be reduced by an allowance for
        the
        amount of the impairment. There is no impairment in 2007 or 2006.
 
 Advertising
        Expenses
 
 The
        Company expenses advertising expenses as incurred. Advertising expense for
        the
        three and nine months ended June 30, 2007 and 2006 was $ 1,500, $3,408 and
        $5,552 and $6,494 respectively.




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          8
          -*




**FALCON
      RIDGE DEVELOPMENT, INC.**




**Notes
      to Consolidated Financial Statements**


**(Unaudited)**





Stock-based
        Compensation
 
 The
        Company adopted Statement of Financial Accounting Standards No. 123 (revised
        2004), Share-Based Payment (SFAS 123R), effective January 1, 2006. SFAS 123R
        requires the recognition of the fair value of stock-based compensation in
        net
        income. The Company has elected the modified prospective transition method
        for
        adopting SFAS 123R. Under this method, the provisions of SFAS 123R apply
        to all
        awards granted or modified after the date of adoption. In addition, the
        unrecognized expense of awards not yet vested at the date of adoption,
        determined under the original provisions of SFAS 123, shall be recognized
        in net
        income in the periods after the date of adoption. The Company had no unvested
        awards at June 30, 2007 and 2006 respectively.
 
 Income
        Taxes
 
 Income
        taxes are accounted for using the asset and liability method. Under this
        method,
        deferred income tax assets and liabilities are recognized for the future
        tax
        consequences attributable to temporary differences between the financial
        statement carrying amounts of existing assets and liabilities and their
        respective tax bases. Deferred income tax assets and liabilities are measured
        using enacted tax rates expected to apply to taxable income in the years
        in
        which these temporary differences are expected to be recovered or settled.
        The
        effect on deferred tax assets and liabilities of a change in tax rates is
        recognized in income in the period that includes the enactment date. A valuation
        allowance is provided for deferred tax assets that are not expected to be
        recovered from future operations.
 
 In
        tax
        year December 31, 2005, the Company operated as a partnership through May
        20,
        2005 and as a "c" corporation for the period May 21, 2005 through December
        31,
        2005 and therefore was exempt from taxation; instead, its earnings and losses
        are included in the personal returns of the members and taxed depending on
        the
        individual's personal tax situation. The Company is the sole member of its
        two
        subsidiaries and consequently includes their activity in its return on a
        consolidated basis. The Company has a tax loss of approximately $1,037,829
        which
        is available to reduce taxable income in future years. Use of the loss will
        expire in 2027.
 
 Financial
        Instruments and Concentration of Credit Risk
 
 The
        carrying amounts of the Company's financial assets and liabilities, including
        cash, accounts payable, and preferred shares with mandatory redemption at
        June
        30, 2007, approximate fair value because of the short maturity of these
        instruments. The carrying amount of the Company's notes payable approximates
        fair value at June 30, 2007, since the notes are at floating rates or fixed
        rates that approximate current market rates for notes with similar risks
        and
        maturities.
 
 For
        the
        period ended June 30, 2006 100 percent of the Company's sales were to three
        homebuilders.
 
 
 Preferred
        Shares subject to mandatory redemption
 
 The
        features of our Series B Preferred Stock within SFAS 150 “Accounting for Certain
        Financial Instruments with Characteristics of both Liabilities and Equity”. Due
        to redemption features of the securities, the preferred shares are being
        classified as a liability in these financial statements. The securities give
        the
        holder the option of a net cash settlement or a settlement in common share
        based
        on a conversion rate. The settlement amount under SFAS 150 at June 30, 2007
        would have been approximately 731,027 shares at a average close price of
        $ .8846
        per share or $ 646,666.


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          9
          -*







**FALCON
        RIDGE DEVELOPMENT, INC.**
 
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**





New
        Accounting Standards
 
 SFAS
        No.
        151, "Inventory Costs," is effective for fiscal years beginning after June
        15,
        2006. This statement amends the guidance in Accounting Research Bulletin
        ("ARB")
        No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal
        amounts of idle facility expense, freight, handling costs, and wasted material
        (spoilage). The adoption of SFAS 151 did not have a material impact on the
        Company's financial statements.
 
 SFAS
        No.
        152, "Accounting for Real Estate Time-Sharing Transactions," is effective
        for
        fiscal years beginning after June 15, 2005. This statement amends SFAS No.
        66,
        Accounting for Sales of Real Estate, to reference the financial accounting
        and
        reporting guidance for real estate time-sharing transactions that is provided
        in
        American Institute of Certified Public Accountants Statement of Position
        04-2,
        Accounting for Real Estate Time-Sharing Transactions. The adoption of SFAS
        No.
        152 did not have a material impact on the Company's
 financial
        statements.
 
 SFAS
        No.
        123(R), "Share-Based Payment," replaces SFAS No. 123, "Accounting for
        Stock-Based Compensation," and supersedes APB Opinion No. 25, "Accounting
        for
        Stock Issued to Employees." This statement requires that the compensation
        cost
        relating to share-based payment transactions be recognized in the financial
        statements. The Company is required to apply this statement in the first
        interim
        period that begins after December 15, 2005. The adoption of SFAS No. 123(R)
        did
        not have a material impact on the Company's financial.
 
 SFAS
        No.
        153, "Exchanges of Non-monetary Assets" - an amendment of APB Opinion No.
        29, is
        effective for fiscal years beginning after June 15, 2005. This statement
        addresses the measurement of exchange of non-monetary assets and eliminates
        the
        exception from fair-value measurement for non-monetary exchanges
 of
        similar productive assets in paragraph 21(b) of APB Opinion No. 29, "Accounting
        for Non-monetary Transactions," and replaces it with an exception for exchanges
        that do not have commercial substance. The adoption of SFAS No. 153 did not
        have
        a material impact on the Company's financial statements.
 
 FIN
        No.
        46(R) revised FIN No. 46, "Consolidation of Variable Interest Entities,"
        requiring the consolidation by a business of variable interest entities in
        which
        it is the primary beneficiary. The adoption of FIN No. 46 did not have an
        impact
        on the Company's financial statements.
 
 The
        EITF
        reached a consensus on Issue No. 04-8, "The Effect of Contingently Convertible
        Debt on Diluted Earnings Per Share" ("EITF 04-8"), which addresses when the
        dilutive effect of contingently convertible debt instruments should be included
        in diluted earnings (loss) per share. EITF 04-8 is effective for reporting
        periods ending after December 15, 2004. The adoption of EITF 04-8 did not
        have
        an impact on diluted earnings (loss) per share.
 
 (2)
        Related Party Transactions
 
 The
        Company conducts its operations in a building rented by an affiliate. During
        the
        three and nine months ended June 30, 2007 and 2006, the Company recorded
        rent
        expense of $16,750, $15,500and $48,250 and $45,500, respectively. At June
        30,
        2007 the Company owed rent in the amount of $ 12,109, which is included in
        accounts payable.


*-
          10
          -*





**FALCON
      RIDGE DEVELOPMENT, INC.**





**Notes
      to Consolidated Financial Statements**


**(Unaudited)**







The
        Company's affiliate pays certain expenses on its behalf. The Company reimburses
        these expenses paid on its behalf by the affiliate at actual cost. Overhead
        expenses and indirect labor incurred by the affiliate are allocated to the
        Company based on management-approved estimates of time and effort. The Company
        reviews the estimated rate from time-to-time.
 
 Indebtedness
        to related parties consisted of the following at June 30, 2007:
 
 Note
                    payable to Karen Duran, interest at 8.5%, principal and interest
                    payable
                    in annual installments of $17,000Total
                    financing under the agreement is $200,000
              
              $
              191,000Note
                    payable to Karen Duran, interest at 8.5%,
                principal
                    and interest payable May 25,2007Total
                    financing under the agreement is $150,000
              
              
              150,000Advances
                    payable to shareholders, payable on demand
              
              
              241,029Advances
                    payable to Falcon Ridge Development LLC, an affiliate, payable
                    on
                    demand
              
              
              637,864Accrued
                    interest payable
              
              
              46,516$
              1,266,409


(3)
        Fixed
        Assets
 
 Fixed
        assets consist of the following at June 30, 2007:
 
 Cost
              
              
              Accumulated
                  DepreciationSoftware
              
              $
              32,349
              
              
              $
              5,487Equipment
              
              
              7,981
              
              
              
              3,192$
              40,330
              
              
              $
              8,679
 
 Depreciation
        expense is included in selling, general and administrative expenses in the
        accompanying financial statements. For the three and nine months ended June
        30,
        2007 and 2006 the Company recorded depreciation expense of $1,577, $1,050
        and
        $4,731 and $2,494 respectively.
 
 (4)
        Real
        Estate Operations
 
 The
          Company completed development of Sierra Norte I and II subdivisions in
          Rio
          Rancho, New Mexico in 2006. The Company is in the process of developing
          approximately 139 acres of raw land in the Belen, New Mexico referred to
          as
          "Spanish Trails." Spanish Trails consists of land platted into approximately
          517
          home sites. Home sites will be sold to different builders or developed
          by the
          Company.


*-
          11
          -*





**FALCON
      RIDGE DEVELOPMENT, INC.**





**Notes
      to Consolidated Financial Statements**


**(Unaudited)**








Real
      estate held for resale, consists of the following at June 30, 2007:





Land
                  acquisition costs
            
            $
            2,201,727Land
                  development costs
            
            
            851,034Capitalized
                  interest
            
            
            109,451$
            3,162,212





(5)
      Note
      Payable long term





Note
      payable consists of the following at June 30, 2007:




Note
                payable to Toby and Mary Ann Cordova, with interest at 6.5 percent,
                principal and interest payable in semi-annual installments of $21,862,
                collateralized by a real estate contract due 2-18-2019Total
                financing under the agreement is $435,000
            
            $
            360,483




Note
                  payable to an individual, repayable with interest calculated at
                  10% per
                  annum on the receipt of $ 5,000,000 from a private placement of
                  securities
                  or six months whichever comes first. The note may be extended for
                  ninety
                  days with the payment of a two percent renewal fee.Total
                  financing under the agreement is $200,000
              
              200,000$
              560,483




Aggregate
      maturities required on long-term debt at June 30, 2007, are as
      follows:





Year
                ending June 30,2008
            
            $
            220,6242009
            
            
            21,9872010
            
            
            23,4392011
            
            
            24,9872012
                  and thereafter
            
            
            269,446$
            560,483







*-
          12
          -*





**FALCON
      RIDGE DEVELOPMENT, INC.**





**Notes
      to Consolidated Financial Statements**


**(Unaudited)**


(6)
          Income Taxes
 
 A
          reconciliation of U.S. statutory federal income tax rate to the effective
          rate
          follows for the period ended June 30, 2007:
 
 U.S.
                      statutory federal rate
                
                
                20.000
                %State
                      income tax rate
                
                
                4.80
                %Net
                      operating loss for which no tax benefit is currently
                      available
                
                
                -24.800
                %0.00
                %
 
 At
          June
          30, 2007, the Company has a net operating loss carry forward for federal
          income
          tax purposes of approximately $1,041,489, which was fully allowed for in
          the
          valuation allowance of $258,289. The valuation allowance offsets the net
          deferred tax asset for which there is no assurance of recovery. The change
          in
          the valuation allowance for the nine month period ended June 30, 2007 is
          $198,248.  The Company had no material temporary differences other
          than the net operating loss carry-forwards.
 Because
          of various stock transactions during 2005, management believes the Company
          has
          undergone an "ownership change" as defined by Section 382 of the Internal
          Revenue Code. Accordingly, the utilization of a portion of the net operating
          loss carry forward may be limited. Due to this limitation, and the uncertainty
          regarding the ultimate utilization of the net operating loss carry forward,
          no
          tax benefit for losses has been provided by the Company in the accompanying
          financial statements. The net operating loss carry forward will expire
          in
          2027.
  
 (7)   
          Shareholders' Deficit
 
 Preferred
          Stock
 
 On
          July
          20, 2005, the Company established Series A Convertible Preferred Shares
          and
          authorized 400,000 shares. The preferences are as follows:
 
 ·
                Shares
                    are non-cumulative with a preference over common shares if and
                    when a
                    dividend is declared.
 
 ·
                Shares
                    are convertible into common stock at any time on the basis of
                    100 common
                    shares for 1 share of preferred stock. This conversion rate is
                    subject to
                    adjustments for forward or reverse splits or other capitalizations.
                    The
                    option was of no intrinsic benefit, at the commitment date, to
                    the
                    preferred shareholder.
  ·
                  Shares have a priority over common shares upon
                    liquidation.
 ·
                Shares
                    are callable at any time by the Company at the original purchase
                    price.
                    The Preferred Shareholders will have thirty days thereafter to
                    convert to
                    common stock.
 
 8)         Preferred
          Shares subject to mandatory redemption
 
 The
          features of our Series B Preferred Stock and determined that it falls within
          SFAS 150 “Accounting for Certain Financial Instruments with Characteristics of
          both Liabilities and Equity”. Due to redemption features of the securities, the
          preferred shares are being classified as a liability in these financial
          statements. The securities give the holder the option of a net cash settlement
          or a settlement in common share based on a conversion rate.  The value
          of the liability is fixed at the stated value of $485,000.  However,
          the number of common shares into which the preferred shares are convertible
          is
          inversely related to changes in the Company’s common stock.  Although
          the potential conversion could conceivably require the Company to issue
          a number
          of shares in excess of its authorized limit, the Company does not believe
          that
          its liability recorded at June 30, 2007, associated with the Series B preferred
          stock is appropriate in that such obligation would not exceed the aggregate
          stated value.
 
 *-
          13
          -*





**FALCON
      RIDGE DEVELOPMENT, INC.**





**Notes
      to Consolidated Financial Statements**


**(Unaudited)**






On
        April
        15, 2006, the Company established Series B Convertible Preferred Shares and
        authorized 400,000 shares. The preferences are as follows:
 
 ·
              Shares
                  are non-cumulative with a preference over common shares if and
                  when a
                  dividend is declared.
 
 ·
              Investor
                  will receive a dividend of 12% per annum payable monthly for a
                  period of
                  eighteen months from the date of
                  purchase.
 
 ·
              Shares
                  are convertible into common stock at any time on the basis of 75%
                  of the
                  average current bid price for the preceding 20 days of the Company's
                  receipt of notice to convert. This conversion rate is subject to
                  adjustments for forward or reverse splits or other capitalizations.
                  The
                  option was of no intrinsic benefit, at the commitment date, to
                  the
                  preferred shareholder.
 
 ·
              Shares
                  have a priority over common shares upon
                  liquidation.
 
 ·
              Shares
                  are callable by the Company at any time after 12 months of issuance
                  of
                  Preferred B shares at the original purchase price. The Preferred
                  Shareholders will have sixty days thereafter to convert to common
                  stock.
                  The shares will be repurchased after eighteen months for the original
                  issue price.
  (9) 
          Subsequent Event
  On
          July
          12, 2007 the company’s wholly owned subsidiary Spanish Trails LLC acquired
          refinancing of  $ 1,150,000 as follows;
 
 Mortgage
                    payable , with interest at the greater of 12.00 percent or prime
                    plus 4
                    through July 11, 2008 and the greater of 15.00 percent or prime
                    plus 7
                    from July 12, 2008 through July 11, 2009, interest payable monthly
                    and
                    principal due July 11, 2009, collateralized by a real estate
                    mortgage.  Prime rate is determined as the rate announced in the Wall
                    Street Journal.Total
                    financing under the agreement is
                    $1,150,000




*-
          14
          -*





**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.**








The
        following discussion of our financial condition and results of operations
        should
        be read in conjunction with, and is qualified in its entirety by, the
        consolidated financial statements and notes thereto included in Item 1 in
        this
        Quarterly Report on Form 10-QSB. This item contains forward-looking statements
        that involve risks and uncertainties. Actual results may differ materially
        from
        those indicated in such forward-looking statements.
 
 Forward-Looking
        Statements
 
 This
        Quarterly Report on Form 10-QSB and the documents incorporated herein by
        reference contain forward-looking statements that have been made pursuant
        to the
        provisions of the Private Securities Litigation Reform Act of 1995. Such
        forward-looking statements are based on current expectations, estimates,
        and
        projections about our industry, management beliefs, and certain assumptions
        made
        by our management. Words such as "anticipates," expects," "intends," "plans,"
        "believes," "seeks," "estimates," variations of such words, and similar
        expressions are intended to identify such forward-looking statements. These
        statements are not guarantees of future performance and are subject to certain
        risks, uncertainties, and assumptions that are difficult to predict; therefore,
        actual results may differ materially from those expressed or forecasted in
        any
        such forward-looking statements. Unless required by law, we undertake no
        obligation to update publicly any forward-looking statements, whether as
        a
        result of new information, future events, or otherwise. However, readers
        should
        carefully review the risk factors set forth in other reports and documents
        that
        we file from time to time with the Securities and Exchange Commission,
        particularly our Annual Reports on Form 10-KSB and any Current Reports on
        Form
        8-K.
  Overview
        and History
 
 We
        are a
        Nevada corporation with two subsidiaries, Sierra Norte, LLC ("Sierra Norte")
        and
        Spanish Trails, LLC ("Spanish Trails"). We are in the real estate industry
        and
        acquire tracts of raw land and develop them into residential lots for sale
        to
        homebuilders. We plan to expand our operations in 2007 into homebuilding
        on our
        Spanish Trails lots. Our executive offices are located in the Albuquerque,
        New
        Mexico area.
 
 On
        May
        20, 2005, we completed a reverse acquisition transaction. We acquired Sierra
        Norte, a New Mexico limited liability company, which thereby became our
        wholly-owned subsidiary. Sierra Norte is a land development company in the
        Albuquerque, New Mexico area. Formerly we were a technology company which
        was in
        the business of developing and marketing color comparison devices. We acquired
        Spanish Trails on July 6, 2005 as discussed below.
 
 As
        a
        result of the Sierra Norte acquisition, the former security holders of Sierra
        Norte acquired a majority of our outstanding shares of common stock. For
        accounting purposes, Sierra Norte has been deemed to be the acquirer in the
        acquisition and, consequently, the assets, liabilities and historical operations
        that are reflected in our financial statements are those of Sierra Norte,
        which
        are recorded at the historical cost basis of Sierra Norte. The reverse
        acquisition was consummated under Colorado law pursuant to an Agreement and
        Plan
        of Reorganization dated May 20, 2005.
 
 On
        July 6, 2005, we entered into an exchange of securities whereby we acquired
        100%
        of the ownership of Spanish Trails, in exchange for the issuance of a total
        of
        614,882,069 (pre-reverse split) of our common shares. As a result of the
        Spanish
        Trails acquisition, the former security holders of Spanish Trails acquired
        a
        majority of our outstanding shares of common stock, but we did not have a
        change
        of control because the owners of a majority of Spanish Trails were the executive
        officers and majority shareholders of the Company. After the exchange,
        752,262,441 (pre-reverse split) shares of common stock were issued and
        outstanding.
  *-
            15
            -*


Also,
        on
        July 6, 2005 we reincorporated our company to Nevada from Colorado and changed
        our name to Falcon Ridge Development Inc., after shareholder approval. In
        connection with the name change, we changed to a new trading symbol,
        FLRD.BB.
 
 On August 10 we affected a 1 for 200 reverse split of our common stock. This
        reduced the authorized capital form 900,000,000 common shares to 4,500,000
        common shares and the outstanding common shares from 752,262,441 to 3,761,233.
        We changed our trading symbol to FCNR.BB.
 
 Our
        Spanish Trails project is progressing through local real estate governmental
        clearance toward final approval of our platting plan. We anticipate the process
        should be completed by mid-2008. When our platting plan receives final approval,
        we will be able to begin construction of the first phase of development of
        approximately 517 lots for single family homes. Considerable up front costs
        in
        any real estate platting project must first be incurred and paid for, thus
        in
        the early stages of our real estate projects significant amounts of capital
        can
        be required until platting occurs, and lots are improved and sold. Predictably,
        greater revenues will be achieved as soon as a portion of the lots are improved
        and sold. When the lot development has been completed and accepted by the
        Valencia County, New Mexico, engineers and construction of the lots completed,
        the sale of those lots will be funded and closed. It is also our intention
        to
        initiate a home building division on some of the remaining developed Spanish
        Trails project lots not sold to homebuilders. We expect to have initial models
        open in the Spring of 2008. The sale of homes and, consequently, the pace
        of
        construction, will be determined by the rate of market absorption.
 
 Results
        of Operations
 
 Three
        and nine months Ended June 30, 2007 Compared to 2006
 
 We
        had no
        revenue for the three and nine months ended June 30, 2007 compared to revenues
        of $643,969 for the three and nine months ended June 30, 2006. This decrease
        was
        primarily attributable to our lack of project funding. In 2005, we had completed
        and sold out the Sierra Norte development.
 
 Our costs of sales for the three and nine months ended June 30, 2007 was
        $ 0
        compared to costs of sales of $689,730 for the three and nine months June
        30,
        2006. This decrease is due to having no lot sales in 2006. Our selling, general
        and administrative expenses for the three and nine months ended June 30,
        2007
        were $100,884
        and $799,789, compared to selling, general and administrative expenses of
        $
        171,978 and $479,414 for the three and nine months ended June 30, 2006. The
        significant increase in the nine months ended June 30, 2007 was caused primarily
        by compensation for construction and mortgage consulting in the amount of
        $
        369,800. Other major components of these expenses are salaries, payroll taxes
        and professional fees. We have reduced payroll in periods after June 30,
        2006.
        We expect to increase our staff in the near future as development activity
        picks
        up.
 
 Due
          primarily to increased lack of lot sales and increased general and
          administrative expenses as a result of being a public company, we incurred
          a
          loss of $ $100,884 or $0.00 per share and $799,789, or $0.00 per share,
          for the
          three and nine months ended June 30, 2007 compared to a loss of $171,978
          or
          $0.00 per share and $525,175, or $0.00 per share, for the three and nine
          months
          ended June 30, 2006.
 
 Our
          principal source of revenue in the near term is expected to be from the
          land we
          own in the Belen New Mexico Spanish Trails project, which is being developed
          as
          discussed above. In this development, we plan to be a homebuilder as well
          as a
          land developer. The timeframe over which developed lots and /or homes will
          be
          sold may be several years. We have made deposits on additional in Oregon
          land
          that may be developed if the necessary capital and/ or financing becomes
          available.
  *-
              16
              -*


Liquidity
        and Capital Resources
 
 At
        June
        30, 2007 our cash position was $130.
 
 Our
        net
        cash used in operating activities was $478,563 for the nine months ended
        June
        30, 2007, compared to net cash used by operating activities of $1,186,960
        for
        the nine months ended June 30, 2006.
 
 Our
        net
        cash used by investing activities was $ 0 for the nine months ended June
        30,
        2007, compared to $32,349 of net cash used by investing activities for the
        nine
        months ended June 30, 2006.
  Our
        net
        cash provided by financing activities was $474,939 for the nine months ended
        June 30, 2007, compared to $959,982 of net cash provided by financing activities
        for the nine months ended June 30, 2006.
 
 From
        time
        to time we need working capital when we do not have funds to pay for lot
        development or general and administrative expenses. During the six months
        ended
        June 30, 2007, our chief financial officer, chief executive officer and Falcon
        Ridge Development LLC (a related party) have loaned us funds for us to meet
        our
        some of our obligations and to continue working on platting and preparing
        lots
        for home building. We cannot assure that such funding will be available in
        the
        future. In December we secured $200, 000 in bridge financing which has helped
        us
        with our working capital needs and allowed us time to continue seeking
        additional capital and other financing allowing us to continue our Spanish
        Trails project.
 
 The
        timing of the completion of the platting of our Spanish Trails project is
        not
        certain, so we cannot assure the timing of cash flow from lot sales. Thus,
        we
        may be faced with a working capital shortage. In that event we may be required
        to seek financing which may not be available or, if available, it could be
        on
        terms which are cost prohibitive to us.
 
 In
        addition, we now expect to begin building homes on our Spanish Trails project
        in
        mid 2008. This initiative will require working capital which we cannot assure
        will be available. We are pursuing debt financing for this
        endeavor.
 
 Most
        of
        our costs are incurred in the initial phases of our real estate projects.
        Our
        profitability depends upon our ability to develop, manage and sell real estate
        projects on a timely basis and to control our costs. We expect that we will
        develop a more consistent pipeline of activity as we mature and, thereby,
        a more
        consistent source of revenues and profit. If we succeed in this effort and
        generate sufficient revenues, we will expect to be profitable. However, we
        cannot assure that we will be profitable.
 
 We
        do not
        intend to pay dividends for the foreseeable future. We do not expect our
        revenues to be impacted by seasonal demands.
 
 Recently
        Issued Accounting Pronouncements
 
 We do not expect the adoption of any recently issued accounting pronouncements
        to have a significant impact on our net results of operations, financial
        position, or cash flows.
 
 Critical
        Accounting Policies
 
 The preparation of consolidated financial statements in conformity with
        accounting principles generally accepted in the United States of America
        requires us to make a number of estimates and assumptions that affect the
        reported amounts of assets and liabilities and disclosure of contingent assets
        and liabilities at the date of the financial statements. Such estimates and
        assumptions affect the reported amounts of revenues and expenses during the
        reporting period. On an ongoing basis, we evaluate estimates and assumptions
        based upon historical experience and various other factors and circumstances.
        We
        believe our estimates and assumptions are reasonable in the circumstances;
        however, actual results may differ from these estimates under different future conditions.




*-
          17
          -*


We believe that the estimates and assumptions that are most important to
        the
        portrayal of our financial condition and results of operations, in that they
        require our most difficult, subjective or complex judgments, form the basis
        for
        the accounting policies deemed to be most critical to us. These critical
        accounting policies relate to bad debts, impairment of intangible assets
        and
        long lived assets, contractual adjustments to revenue, and contingencies
        and
        litigation. We believe estimates and assumptions related to these critical
        accounting policies are appropriate under the circumstances; however, should
        future events or occurrences result in unanticipated consequences, there
        could
        impact on our future financial conditions or results of operations.
 
 
 **ITEM
        3. CONTROLS AND PROCEDURES**
 
 Management
        is responsible for establishing and maintaining adequate internal control
        over
        financial reporting. As of the end of the period covered by this report,
        our
        chief executive officer and our chief financial officer evaluated the
        effectiveness of the design and operation of our disclosure controls and
        procedures pursuant to Rule 13a-15b under the Securities Exchange Act of
        1934.
        Based on their review of our disclosure controls and procedures, they have
        concluded that our disclosure controls and procedures are effective in timely
        alerting each of them to material information relating to us that is required
        to
        be included in our periodic SEC filings. Since our Company has been acquired
        as
        a result of the Sierra Norte acquisition discussed above, and a new board
        and
        management has been installed, we have been able to timely file our Form
        10-QSBs
        and our Form 8-Ks. Management is in the continuing process of analyzing and
        adopting new policies and procedures to improve the design and operations
        of our
        disclosure controls, We acknowledge that a change with respect to financial
        controls has been made to alert us with respect to funding provided by related
        parties and that the changes in disclosure controls, particularly recognizing
        Form 8-K events, are ongoing. We expect these changes in internal controls
        will
        have a significant effect on our disclosure controls after the evaluation
        date
        and the date of this report.
 
 Changes
        to Internal Controls include a reorganization of available staff to better
        segregate duties, acquisition and implementation of more sophisticated
        accounting software and a personnel plan to hire additional accounting and
        administrative staff. We continue to schedule training for employees and
        management in critical areas to enhance their ability to perform the duties
        assigned to them.
  *-
            18 -*





**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





There
          are
          no legal proceedings, to which we are a party, which could have a material
          adverse effect on our business, financial condition or operating results.
          However, a former attorney has filed a complaint and obtained a default
          judgment
          against us for fees and costs in the approximate amount of $ 47,000. We
          believe
          that the judgment will be reversed and we will enter into arbitration with
          the
          attorney. We have included $ 38,000 in these financial statements and the
          costs
          assessed by the attorney of approximately $ 9,000 are not included.
  
 **ITEM
          2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
          PROCEEDS.**
 
 On
          June
          29, 2007 the company issued 3,660,346 shares of restricted stock as compensation
          for future services related to advertising, directors' fees, and financial
          and
          administrative services performed by third parties. None of the issued
          shares
          contain warrants or option rights. No underwriters were involved in the
          issuance
          or distribution of the shares. The company issued the shares in reliance
          on
          exemptions from registration including, but not limited to, Exemption 4.1,
          and
          Rule 144 of the Securities and Exchange Act of 1933.


**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





None.








**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None





**ITEM
      5. OTHER INFORMATION**





None





*-
          19 -*





**ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K**





a.
      Exhibits





**Exhibit**
              **No.**
            
            **Description**2.1
            
            Agreement
                and Plan of Reorganization - Pocketspec Technologies, Inc. and Sierra
                Norte LLC (a)2.2
            
            Acquisition
                Agreement - Pocketspec Technologies, Inc. and Spanish Trails, LLC
                (b)3.1
            
            Articles
                of Incorporation of Falcon Ridge Development, Inc. previously
                filed.3.2
            
            Bylaws
                of Falcon Ridge Development, Inc. previously filed.3.3
            
            Articles
                of Organization of Sierra Norte, LLC previously filed.3.4
            
            Operating
                Agreement of Sierra Norte, LLC previously filed.3.5
            
            Articles
                of Organization of Spanish Trails, LLC previously
                filed.3.6
            
            Operating
                Agreement of Spanish Trails, LLC previously filed.4.1
            
            Articles
                of Amendment - Establishment of Series of Preferred Stock previously
                filed.10.1
            
            Purchase
                Agreement - Spanish Trails, LLC and D.R. Horton* (Confidential portions
                of
                this agreement noted by *** have been omitted and filed separately
                with
                the Securities and Exchange Commission pursuant to a request for
                confidentiality under Rule 24b-2 of the Securities Exchange Act of
                1934.)
                Previously filed.10.2
            
            Promissory
                Note - Karen Y. Duran - Sierra Norte, LLC - May 20, 2006 - $150,000
                previously filed.10.3
            
            Promissory
                Note - Karen Y. Duran - Sierra Norte, LLC - June 1, 2006 - $200,000
                previously filed.10.4
            
            Promissory
                Note - Karen Y. Duran - Sierra Norte, LLC - June 19, 2006 - $66,000
                previously filed.14.1
            
            Code
                of Ethics previously filed.21.1
            
            List
                of Subsidiaries previously filed.23.1
            
            Consents
                of experts31.1
            
            Certification
                of Chief Executive Officer pursuant to Rule
                13a-14(a)/15(d)-14(a)*31.2
            
            Certification
                of Chief Financial Officer pursuant to Rule
                13a-14(a)/15(d)-14(a)*32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002*32.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002*99
            
            Additional
                Exhibits - None




______________





*
      Filed
      herewith.





(a)
            Filed
                on May 25, 2006 as Exhibit 2.1 with the Registrant's Current Report
                on
                Form 8-K and incorporated herein by
                reference.





(b)
            Filed
                on July 8, 2006 as Exhibit 10.19 with the Registrant's Current Report
                on
                Form 8-K and incorporated herein by
                reference.


______________


b.
            Reports
                on Form 8-K




Report
        8-K for the
        incorporation of Falcon Ridge Financial, LLC, a wholy owned
        subsidiary, filed on April 20, 2007.


*-
          20 -*







**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.











Falcon
                Ridge Development, Inc.Dated:
                August 14, 2007
            By:
            /s/
                Fred M. MontanoFred
                M. MontanoPresident,
                Chief Executive Officer, and DirectorDated:
                August 14, 2007
            By:
            /s/
                Karen Y. DuranKaren
                Y. DuranVice
                President, Treasurer and Chief Financial Officer





*-
          21 -*




**EXHIBIT
      INDEX**










**Exhibit**
              **No.**
            
            **Description**2.1
            
            Agreement
                and Plan of Reorganization - Pocketspec Technologies, Inc. and Sierra
                Norte LLC (a)2.2
            
            Acquisition
                Agreement - Pocketspec Technologies, Inc. and Spanish Trails, LLC
                (b)3.1
            
            Articles
                of Incorporation of Falcon Ridge Development, Inc. previously
                filed.3.2
            
            Bylaws
                of Falcon Ridge Development, Inc. previously filed.3.3
            
            Articles
                of Organization of Sierra Norte, LLC previously filed.3.4
            
            Operating
                Agreement of Sierra Norte, LLC previously filed.3.5
            
            Articles
                of Organization of Spanish Trails, LLC previously
                filed.3.6
            
            Operating
                Agreement of Spanish Trails, LLC previously filed.4.1
            
            Articles
                of Amendment - Establishment of Series of Preferred Stock previously
                filed.10.1
            
            Purchase
                Agreement - Spanish Trails, LLC and D.R. Horton* (Confidential portions
                of
                this agreement noted by *** have been omitted and filed separately
                with
                the Securities and Exchange Commission pursuant to a request for
                confidentiality under Rule 24b-2 of the Securities Exchange Act of
                1934.)
                Previously filed.10.2
            
            Promissory
                Note - Karen Y. Duran - Sierra Norte, LLC - May 20, 2006 - $150,000
                previously filed.10.3
            
            Promissory
                Note - Karen Y. Duran - Sierra Norte, LLC - June 1, 2006 - $200,000
                previously filed.10.4
            
            Promissory
                Note - Karen Y. Duran - Sierra Norte, LLC - June 19, 2006 - $66,000
                previously filed.14.1
            
            Code
                of Ethics previously filed.21.1
            
            List
                of Subsidiaries previously filed.23.1
            
            Consents
                of experts31.1
            
            Certification
                of Chief Executive Officer pursuant to Rule
                13a-14(a)/15(d)-14(a)*31.2
            
            Certification
                of Chief Financial Officer pursuant to Rule
                13a-14(a)/15(d)-14(a)*32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002*32.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002*99
            
            Additional
                Exhibits - None




___________________





*
      Filed
      herewith.





(a)
      Filed
      on May 25, 2006 as Exhibit 2.1 with the Registrant's Current Report on Form
      8-K
      and incorporated herein by reference.





(b)
      Filed
      on July 8, 2006 as Exhibit 10.19 with the Registrant's Current Report on Form
      8-K and incorporated herein by reference.







*-
          22 -*